The Hagerman Heavy Metal Mining $($H$2$M$2)$ Corporation wants to diversify its operations. Some recent financial information for the

company is shown here:

$H2M2$ is considering an investment that has the same $\frac{P}{E}$ ratio as the firm. The cost of the investment is $$700,000,$ and it will be

financed with a new equity issue. The return on the investment will equal $H2M2\text{'}$s current ROE.

What will happen to the book value per share? $($Do not round intermediate calculations. Round the final answers to $2$ decimal

places. Omit $ sign in your response.$)$

What will happen to the market$-$to$-$book ratio? $($Do not round intermediate calculations. Round the final answers to $3$ decimal

places.$)$

Current market$-$to$-$book

New market$-$to$-$book

What will happen to the EPS? $($Do not round intermediate calculations. Round the final answers to $2$ decimal places. Omit $ sign in

your response.$)$

What is the NPV of this investment? $($Negative answer should be indicated by a minus sign. Do not round intermediate calculations.

Round the final answer to the nearest whole dollar. Omit $ sign in your response.$)$

NPV $

Does accounting dilution occur here?

Yes

No

Does market value dilution occur here?

Yes

NoThe Hagerman Heavy Metal Mining $($H$2$M$2)$ Corporation wants to diversify its operations. Some recent financial information for the company is shown here:

Stock price $ $90$

Number of shares $25,000$

Total assets $ $7,700,000$

Total liabilities $ $3,700,000$

Net income $ $640,000$

H$2$M$2$ is considering an investment that has the same P$/$E ratio as the firm. The cost of the investment is $$700,000,$ and it will be financed with a new equity issue. The return on the investment will equal H$2$M$2$s current ROE.

What will happen to the book value per share? $($Do not round intermediate calculations. Round the final answers to $2$ decimal places. Omit $ sign in your response.$)$